Spending Reviews - Community Development

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• The inappropriateness of guaranteeing a 15% return on assets rather than on equity, especially when claw-back provisions kick in only after actual returns exceed 20%;  
• The inappropriateness of allowing “incentive double-dipping” by allowing subsidised firms to qualify for accelerated depreciation incentives; and  
• A lack of clarity about whether incentives should be paid on biofuel produced or biofuel delivered to refineries.  

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[accordion title="Provincial%20Office%20Rental%20Accommodation"]"In 2016/17, Provincial Governments collectively leased 1.2 million m2 of office accommodation at an average cost of R 120 /m2 per month -- at a total cost of R151 million month/R1.8 billion per year. Most of lease expenditure (85%) were in the major economic centres of the provinces, where average costs are R125/m2 for leases of offices that averaged 5,400m2 in size. Elsewhere, leases tend to be considerably smaller. Departments in Government’s social cluster accounts for more than 50% of the leased space. These leases tend to be larger offices- over 2,000m2 - and primarily in CBDs & Main Centres, at an average rental of R126/m2. Leases for departments in the Economic and Governance clusters are for between 1,500 – 1,600m2 at an average R120/m2. Just over 20% of the total rental expenditure is on leases that have expired and are running on a month-to-month. Based on market benchmarks, it is estimated that about a third of monthly expenditure is on leases the cost of which is above market norms. Most of the expenditure above market is in the CBD and Main Centres, and just under 90% of the expenditure above market was in 6 provinces. Just under 80% of these lease in the CBD & Main Centre that are above market. A lease maturity analysis was not conclusive in providing a correlation of mature leases and rentals above market. Potential savings were estimated to be in the range of R600 million to R1.2 billion over three years."Artisan training has been revived from a low of 4 500 artisans in 2005 to nearly 15 000 in 2013, at a cost to government of just over R4 billion a year. The National Development Plan sets a target of 30 000 artisans a year by 2030, and expenditure is set to increase to over R5 billion by 2016 and nearly R6 billion by 2018. The low throughput rate of 56% remains the biggest obstacle facing the artisan development system. Currently about 27 000 artisan learners enter the system each year, but fewer than 15 000 qualify. The system consists of multiple routes, many of which are complex and do not optimally integrate theoretical, practical and workplace knowledge and exSRience. Public TVET colleges face a number of challenges in providing artisan programmes, including significant capacity constraints, a curriculum that is not aligned with the outcomes of trades and local economic needs, uneven levels of trade exSRtise among teachers, and inadequate work exSRience and employment opportunities for students. Significant investment cannot be avoided; there is no cheap way of training artisans. However, much better value for money can be obtained. The key is to improve the quality and capacity of the programmes so that the private sector regains confidence in the quality of graduates from public TVET colleges. The throughput rates also need to be improved to at least 75%; this would require a much more efficient and centrally managed system. Savings could also be achieved if public TVET colleges conducted more artisan training as part of occupational training programmes. If throughput rates could be improved, unit costs would come down and the expansion required to achieve NDP targets would become more viable and sustainable.[/accordion]

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[accordion title="Rapid%20Verification%20of%20Informal%20Settlements"]A rapid assessment of the upgrading of informal settlements found only 240 000 upgrades, as against the claimed delivery of 400 000 upgrades.[/accordion]

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